BurnLoungeReps

BurnLounge was an online digital music store/business opportunity. Participants could become “Independent Retailers” selling music and merchandise, and some paid extra to become “Moguls” who could earn cash rewards. The Ninth Circuit summarized the business that way and upheld the finding that BurnLounge’s MLM operation was an illegal pyramid scheme. <br/><br/>The FTC sued in June 2007, alleging that BurnLounge sold “product packages” priced from $29.95 to $429.95 per year, made income claims, and primarily compensated participants for recruiting new participants rather than retail product sales.<br/><br/>The final judgment was substantial. The court entered judgment against BurnLounge and CEO Juan Alexander Arnold jointly for $16,245,799.70, intended for consumer reimbursement, with additional disgorgement judgments against other defendants.